Contemporary Issues for Organisational

Survival

CPA Public Sector Accountants Group (Vic)

Presented by Wendy Lundgaard, Director

February 2007
Overview

• Global trends
• Success Differentiators
• Contextual issues for Public Sector
• Contemporary Workforce issues
• Predications and Probabilities.
Globally, what some of the best are
doing:

1. They are focusing on single industries, not

diversifying
2. They are positioning as a major, niche or ultra-
niche for dominance (→ master of own destiny)
3. They are pursuing unique intellectual property
(directly or as a franchisee) or monopoly/oligopoly
licenses (banking, media, gaming)
4. They are outsourcing non-core activities and
functions.
5. They are jettisoning passive (“hard”) assets,
which only provide “rental” returns.
(Phil Ruthven, 2004)
continued

6. They are creating virtual corporations & strategic

alliances
7. They are planning from the outside-in not the
inside-out
8. They are emulating world best practice for their
industry and, where possible, aggressively
globalising their businesses.

9. They are developing unique organisational

cultures.
10. They are leading first and managing second.
(Phil Ruthven, 2004)
Key Themes

• IP (workforce capability + knowledge)

• Unique cultures (effective leadership &
behaviours)
• Outside-In planning (fusion of market
intelligence and customer needs)
• Best practice (goals + performance)
• Leading first (ideas + innovation).
Success Differentiator

• Not Assets • Change

• Not Brand responsiveness
• Not Reputation • Innovation
• Capability
• Productivity
• Quality of
deliverables.
 Success differentiator

Success differentiator is largely driven

by the ’people’ factor.
Contextual issues for Public Sector

• Stakeholder expectations changing

• Altered funding models
• Mums and Dads as indirect
shareholders
• People issues: talent, attraction,
retention.
 Stakeholder Expectations

• Balancing increased expectations with finite

resourcing
• A J Citizen has ‘crisis of confidence’ in
authority (ie church, state/govt, politicians,
authority figures)
• Better informed about rights via increased
education
• Older, more experienced general public, alert
to ‘spin’.
Altered funding models: infrastructure

• Est. $900B required in next 20yrs to retain

high growth economy
• Political pressure to deliver projects within
election cycles, surplus budgets
• Superannuation funds at $1Trillion (2006),
Infrastructure: attractive & stable asset class
• Public Private Partnerships (PPP’s) to
increase = on time, to budget
• Infrastructure current focus. Future?
(P Ruthven Nov 2006)
 Change brings challenges

• Macro issues:
– Global skills shortage
– Ageing pop, health, male partic↓2.4% per decade
– Strong growth expected to continue (China etc)
– Pressure on infrastructure and services.
• Micro issues: (at organisation level)
– No room for complacency, no ‘silver bullet’
– Exposes leadership & strategy deficiencies
– Adaptability and change responsiveness
– Scenario planning & effective Workforce Planning.
Survival Essentials: Workforce Planning

Align STRATEGY With business plan, strategy & goals

Current & future demand for

Assess skills DEMAND resources/ capabilities/locations

Assess current SUPPLY INT: Turnover, age profile, talent

EXT: labour market trends

Identify GAPS Prioritise Shortfalls

Implement HR Strategy (Attract,

Close Gaps, IMPLEMENT Retain, Develop). Implement
Establish performance
REVIEW indicators, metrics (S.Melbourne,HR
Monthly Oct 06)
Workforce Planning: HR Strategy

Employee
Employee
Engagement
Engagement
Age
Age
Management
Management Alignment
Alignment
(Retirement)
(Retirement)

HR
HR
Growing
Strategy
Strategy Performance
Performance
Growing &
&
Capability
Capability Productivity
Productivity

Attraction Workplace
Workplace
Attraction &
& Flexibility
Retention Flexibility &
&
Retention Wellbeing
Wellbeing
HR Strategy: Employee Engagement

• Typical profile:
– Engaged (30%),
– the Not Engaged (54%) and
– the Actively Disengaged (16%)
• Engaged ‘self directed’ - responsible &
accountable
• Rest ‘other directed’ - compliant or rebellious
• Can no longer afford to sift & sack
• Rehabilitation: manager effort and care of
individual: focus on employee needs of respect,
trust, confidence. (K. Ayers, 2006)
HR Strategy: Employee Alignment

• Beyond commitment and engagement

• Knowing what to do, how to do it, how it
‘fits’ with organisations. goals, & feel
supported by manager
• Effort and performance of ALL parts are
united mission / goals
• Externally marketed messages reflect
the reality for employees
• Strong Alignment before ‘change’.
(J.Garriock, Aust. Financial Review Feb 2007)
 Performance & Productivity

• How clear are employees on the strategy /

mission?
• Are employees goals clearly linked to business
objectives? Are rewards appropriately valued?
• How is productivity measured? Ratio’s, metrics,
value for $’s
HR Strategy: Workplace Flexibility

Fertility Rates within Australia -

1921 to 2051
3.6
F e rtility R a te s

3.3

2.7

2.4

2.1

1.8

1.5
Years Years Years Years Years Years Years Years Year Year Year
1921-25 1932-34 1946-48 1953-55 1960-62 1970-72 1980-82 1990-92 1998 2005 2006-51

Years (from 2006 - 51 are projections only)

ABS: Births - 3301.0 - 1998

Issues: Increasing workforce participation through

creative & flexible forms of working.
HR Strategy: Age Management

Expectation of Life from Birth

E x p e c ta tio n o f L ife fro m B irth (Y e a rs )

1920 to 2051
90

85

80

75

70

65

60

55
Years Years Years Years Years Years Years Years Year Year Year Year
1920-22 1932-34 1946-48 1953-55 1960-62 1970-72 1980-82 1990-92 1998 2005 2041 2051

Years (2005 and beyond are projections only)

ABS: Deaths - 3302.0 - 1920-98

Females Males

Issues: mature age worker health & productivity,

retirement transitions, quality part-time, mentors.
HR Strategy: Attraction & Retention

• Sellers Market- Long term global skills shortage

• Unemployment at 4.8% (Full Emplyt @ 5%)
• No growth capacity within unemployment sector
• Aust & NZ Recruitment industry = $16B pa
• Solutions: Retain current, 55+y.o. and mothers
• Other Solutions: skills migration, internal
promotion ( = > development), use of temps &
contractors
HR Strategy: Growing Capability

• “Empires of the Future will be

Empires of the Mind” (Churchill,1943)
• Battle for brainpower - people
+ their skills
• Secondments and overseas
assignments
• Project ownership
• Coaching, mentoring →promotion.
People As Asset or Overhead?

Assets? Investment?
• Deliverables • Responsiveness
• Clients • Retention
• Employee engagement • Competitive advantage
•Skills • Managers ability
• Knowledge, capability &
• Culture, Values and
committment
Workplace Practices
• Relationships at Work

Overhead? Liability?
• Program costs • Risks
•Overtime • OH&S – phys & psych
• Absenteeism • Discrimination
•Turnover • Presenteeism
• Replacement costs • Conflict at work
• IR/ER Reputation
Survival depends on integrated strategy

Employee
Employee
Engagement
Engagement
Age
Age
Management
Management Alignment
Alignment
(Retirement)
(Retirement)

HR
HR
Growing
Strategy
Strategy Performance
Performance
Growing &
&
Capability
Capability Productivity
Productivity

Attraction Workplace
Workplace
Attraction &
& Flexibility
Retention Flexibility &
&
Retention Wellbeing
Wellbeing
For more visit: win-winws.com.au

Presenter: Wendy Lundgaard, Director

February 2007